Canfor transfers forest tenure in B.C. to 2 First Nations

Forestry giant Canfor sold its licence to log B.C.'s fourth-largest timber supply area to two First Nations on Monday.

It sold its tenure for the approximately 64,000-square-kilometre Mackenzie Timber Supply Area in northern B.C. in equal parts to the McLeod Lake Indian Band and the Tsay Keh Dene Nation. 

"Our Nation's purchase of additional forest tenure in the region is more than an economic transaction," McLeod Lake Indian Band Chief Harley Chingee said in a statement. "It is a pivotal step in our journey towards self-determination and empowerment."

The sale will give each nation license to harvest more than 430,000 cubic metres of timber each year. Both nations have existing forestry operations in the area, which lies north of Prince George. The Tsay Keh Dene Nation has an agreement to develop a biomass energy plant in Mackenzie, B.C., in partnership with Provectus Biofuels.

"Canfor is pleased to have reached this arrangement that will expand the Nations' participation in the forest economy and stewardship of forest resources in the region," Stephen Mackie, Canfor's executive vice president of North American operations, said in a statement Monday.

The B.C.-based company estimates its proceeds from the tenure sale, combined with its sale of the Mackenzie Sawmill, amount to about $69 million.

Joan Atkinson, the mayor of the District of Mackenzie, told CBC News the transfer is a huge step toward revitalizing the local forestry industry. 

"I'm very happy to see that this has finally come to fruition," Atkinson said. 

Forestry sector in decline

Canfor stopped operations at the Mackenzie Sawmill in July 2019. That month, the closure of three mills in the area meant about 10 per cent of residents lost their jobs. According to Atkinson, Canfor started shipping the timber harvested in Mackenzie to mills in other districts.

In 2022, Canfor sold the Mackenzie Sawmill to Peak Renewables, a wood pellet and biomass production company.

Atkinson says the recent transfer of land tenure could provide a welcome boost to the local forestry industry.

"It's just a huge step to have some local Indigenous nations who are vested in our community step forward, as opposed to Canfor, who have shown no loyalty to us with the number of jobs that have been lost," she said. 

Harry Nelson, a forestry policy researcher at the University of British Columbia, told CBC News that the transfer marks a trend of First Nations across B.C. taking over local forestry tenures.

"What we could be seeing here is something we didn't have in forestry for a long time — a sort of patient, long-term vision and a focus on sustainability," he said.

"In some ways, forestry might return to its original roots, generating value within local communities." 

The transfer is one of several large transfers of forest licences in B.C. to First Nations. Nelson noted Interfor, a logging giant headquartered in Burnaby, B.C., has signed a series of tenure sales to coastal B.C. First Nations, including a December transfer of a forest licence to the Klahoose First Nation.

But this shift towards Indigenous-led forestry in B.C. may be coming too late, Nelson said.

"We've gone through a period where we've been harvesting a lot," he said. "There may not be a lot left out there. And so nations may be coming in at a point when they're going to be stuck with that. It could be a challenging economic situation."

Employment in logging has been trending downward across B.C. for decades. Last year, numbers from Statistics Canada showed B.C. had lost more than 40,000 forest-sector jobs since the early 1990s.

Logging corporation sees closures and losses

The sale follows a series of mill closures and operating losses for Canfor.

Last week, Canfor announced it would close its sawmills in Vanderhoof and Fort St. John, B.C., by the end of the year. The announcement put hundreds of logging jobs in jeopardy.

Over the past decade, Canfor has closed 10 of its 13 mills in B.C. Canfor is based in Vancouver and has extensive operations overseas.

The closures followed back-to-back quarters of operating losses for Canfor. In 2023, the company posted an operating loss of $532 million. 

In a statement last week, Canfor CEO Don Kayne said Canfor has lost hundreds of millions of dollars in its B.C. operations in recent years.